5 Methods UK Building Societies Can Use to Fight Fraud

Fraud is becoming an urgent and complex challenge for UK Building Societies. In the first six months of 2024 alone, fraud losses in the UK exceeded £571 million—a 19% increase from the same period in 2023. As fraudsters grow more sophisticated, the stakes are especially high for UK Building Societies, which are member-owned and trusted to protect personal finances.

Unlike traditional banks, Building Societies prioritize community values, ethical banking, and personal service, but that commitment to trust and accessibility can also expose them to unique fraud risks.

Common types of fraud for Building Societies

Increased sophistication in audio deepfakes

The digital transformation of financial services has brought convenience, but has also created more opportunities for fraud. Here are the most common forms of fraud affecting UK Building Societies today:

Authorised push payment (APP) fraud

Criminals impersonate trusted figures like banks, police, or Building Society staff to manipulate members into transferring money to fraudulent accounts. Because these transactions are initiated by the customer, stopping them in real-time is challenging.

Account takeover and impersonation fraud

Fraudsters use phishing emails, leaked credentials, or malware to access a member’s account. Once inside, they may change security settings, reroute funds, or pose as the account holder. These attacks are hard to detect, especially if the fraudster mimics legitimate behavior.

First-party fraud

First-party fraud involves a customer intentionally misrepresenting their financial situation to secure loans, credit, or benefits—often with no intention of repayment. The accounts may appear entirely legitimate at first, making these cases difficult to catch early.

The growing threat of fraud for Banking Societies

Today’s fraudsters are using AI, spoofed caller IDs, deepfake voices, and social engineering to bypass traditional security measures. Building Societies are being targeted through both digital and voice channels, and smaller institutions often don’t have access to the advanced fraud detection tools used by larger banks.

The latest fraud tactics are designed to exploit human trust and system vulnerabilities so it is critical for Building Societies to rethink their approach to fraud detection. Delays in fraud detection can lead to financial losses, member dissatisfaction, and reputational damage.

5 effective fraud detection methods for Building Societies

Building Societies need proactive, tech-forward strategies to keep fraud at bay. Here are five methods worth prioritizing:

1. Implement advanced voice analysis

Unique characteristics in a person’s voice—such as pitch, tone, and speech patterns—can be analyzed to verify identity. Unlike passwords or PINs, voices are difficult to perfectly replicate. That’s why voice analysis can be a powerful tool for verifying identities, especially when used alongside other authentication factors.

With solutions like Pindrop® Passport, Building Societies can:

• Authenticate members passively during phone calls
• Reduce call times by eliminating manual verification
• Flag anomalies when voice patterns don’t match the enrolled voice

Voice analysis not only improves security but also makes the process faster and more user-friendly for members.

2. Raise awareness of emerging threats

Education is a powerful defense against fraud. Building Society members and staff need regular updates about the latest scams, especially those using social engineering or deepfake audio.

• Launch fraud awareness campaigns via email, website banners, and branch signage
• Offer training sessions for employees
• Use case studies and real-life scenarios to help members recognize red flags

Proactive education empowers members to pause and question suspicious requests to help detect fraud before it starts.

3. Strengthen online security with multifactor authentication

Passwords alone are often no longer enough. Multifactor authentication (MFA) requires users to provide two or more pieces of evidence, like a password or a one-time code, to access their accounts.

Pindrop offers multifactor authentication tools that Building Societies can use to add extra layers of protection to online and mobile banking, detect unauthorized access attempts even if login credentials are compromised, and provide a seamless user experience.

4. Use systems that can help detect fraud in real time

Fraud monitoring tools like Pindrop® Protect can help identify suspicious activity as it happens by analyzing:

• Call metadata (e.g., origin, device, routing patterns)
• Voice anomalies (e.g., deepfake indicators, tone shifts)
• Behavioral patterns (e.g., frequency, timing, access points)

These insights contribute to the risk analysis in Pindrop® Protect, which can help banking institutions detect fraud early and respond quickly, minimize financial losses, and reduce false positives that block legitimate member access.

5. Collaborate with law enforcement and industry partners

Fraudsters often operate across networks. Sharing information is vital so that organizations across the industry can spread the latest information on threats and response strategies, and gain access to fraud databases. It is vital for organizations across the banking industry to share information on the latest fraud threats and response strategies as a shield from fraudsters operating across different networks.

Partnering with UK fraud initiatives, joining a fraud-prevention collective (like the benefits offered to Pindrop fraud consortium members) or financial crime task force, and working closely with law enforcement when fraud occurs are great ways to help protect your Building Society from repeat fraud attacks.

The role of AI in fraud detection

Artificial intelligence offers a powerful toolkit for detecting fraud before it causes damage to your organization.

Leveraging AI for pattern recognition

AI can process thousands of data points across multiple channels to detect anomalies in near real-time. For Building Societies, AI can learn what typical behavior looks like for members and flag deviations like unusual login times, unfamiliar devices, or rapid money movement.

These systems become more accurate over time to reduce false positives, remove friction for legitimate members, and improve fraud detection rates.

Deepfake audio detection for Building Societies

Fraudsters are increasingly using deepfake technology to impersonate members or staff over the phone. This kind of fraud is difficult for humans to detect, but Pindrop’s deepfake detection tools can help mitigate risk by:

• Identifying signs of synthetic or manipulated speech
• Detecting inconsistencies in audio waveforms
• Alerting agents to suspicious calls in real-time

Future-proofing fraud detection strategies

Fraud tactics are evolving rapidly and detection strategies that work today may not be enough tomorrow. Continuous improvement is key to protecting both your institution and your members from fraud. To stay ahead, Building Societies should:

• Regularly audit and update their security infrastructure
• Invest in AI and machine learning technologies that evolve and improve over time
• Create feedback loops between fraud detection teams, IT, and customer service

Enhance your fraud detection strategy with Pindrop solutions

As fraudsters become more creative, Building Societies need innovative tools to match. Pindrop voice security and fraud detection solutions can help protect members, reduce fraud losses, and streamline authentication processes without sacrificing your commitment to personal and ethical banking.

Want to see what smarter fraud detection looks like? Talk with an expert.

¹ https://www.ukfinance.org.uk/system/files/2024-10/Half%20Year%20Fraud%20Report%202024.pdf